ACCC takes on Flight Centre over alleged price fixing

The country’s largest travel agent,
Flight Centre
, has run foul of the competition regulator, which launched court proceedings on Friday against the company for alleged attempts at price fixing with international airlines.

In a statement the Australian Competition and Consumer Commission alleged that on six occasions between 2005 and 2009, Flight Centre attempted to induce Singapore Airlines, Malaysian and Emirates to stop selling air fares at prices less than offered by the travel agent. The regulator said: “It is alleged that the purpose and likely effect of the arrangements sought by Flight Centre was to maintain the level of Flight Centre’s commissions."

Flight Centre managing director
Graham Turner
defended the company’s talks with the airlines, saying they amounted to “legitimate discussions" to ensure access to all fares they released to the market.

“We will vigorously defend our position," Mr Turner said. “It appears from the documents that the ACCC has issued that it considers FLT to somehow be a competitor of the airlines whose products it sells, rather than an agent for those airlines."

The company “is not in the business of making air fares more expensive and does not ask suppliers to raise prices or to withdraw fares," he said.

Lawyers called the action a “big deal". “It’s a demonstration of the chairman’s publicly stated mission that the ACCC should take on more test cases in the areas which haven’t been sufficiently explored to date," said Middletons partner Murray Deakin. “It’s significant in that obviously Flight Centre is a major travel agency business and seller of passenger freight services, so it’s a significant industry player."

The ACCC first requested information regarding the talks with the airlines almost three years ago.

“Despite numerous requests from Flight Centre, the ACCC failed to explain the legal basis of its position or to describe the conduct it believed the company should desist from," Mr Turner said.